American health insurance giant Anthem is acquiring its rival Cigna for USD48.3 billion, creating a combined insurance company that will have an estimated USD115 billion revenue and serve 53 million clients.

In a statement on Friday, Anthem said the merger will give the insurer nearly USD2 billion in annual cost savings. The merger, however, requires one-time charges of USD600 million over a two-year period.

“We believe that this transaction will allow us to enhance our competitive position and be better positioned to apply the insights and access of a broad network and dedicated local presence to the health care challenges of the increasingly diverse markets, membership, and communities we serve,” said Joseph Swedish, President and Chief Executive Officer of Anthem in a press release.

The transaction is expected to close in the second half of 2016, pending the receipt of customary approvals, including certain state regulatory approvals and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

In addition, the transaction is subject to customary closing conditions, including the approval of Cigna’s shareholders of the merger agreement and Anthem’s shareholders of the issuance of shares in the transaction.

Anthem is confident in its ability to obtain all necessary regulatory and other approvals.

Meanwhile, Japanese life insurer Meiji Yasuda Life Insurance announced that it will pay USD5 billion to acquire StanCorp Financial Group, a US-based publicly traded insurance company.

Reuters reported that the Japanese insurer has agreed to acquire all outstanding shares of StanCorp for USD115 per share in cash. This represents a 50 percent premium over StanCorp’s share price as of the close of business on Thursday.

The Oregon-based Stancorp Financial Group offers insurance and retirement products to companies and individuals and has about USD2bn in premium revenues.

Meiji Yasuda said the 50 percent premium it paid was appropriate given StanCorp’s growth potential.

StanCorp will be delisted from the New York Stock Exchange once the deal is completed. – BusinessNewsAsia.com

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